Jack in the Box to close 67 Qdoba restaurants
SAN DIEGO, Calif. – Jack in the Box plans to close 67 company owned Qdoba Mexican Grill restaurants by the end of fiscal year 2013 in an effort to focus on core markets.
“After a comprehensive review and an in-depth analysis of our real estate portfolio, we believe we can significantly improve Qdoba’s performance and continue to grow the brand,” said Tim Casey, president of Qdoba. “By closing these locations and optimizing our company footprint, we can be more effective in focusing our advertising and marketing resources to support existing and planned restaurants in our core markets where we have high levels of brand awareness.
“We also expect to provide an even better dining experience for our guests as our operations teams concentrate their efforts on supporting these markets,” he added.
The company will take pre-tax charges during fiscal 2013 of approximately $40 million, including an estimated $28 million in non-cash impairment charges and approximately $12 million in charges related to cash lease obligations and employee severance costs.
“These closures are expected to have a positive impact on the financial performance of our Qdoba brand, resulting in higher future earnings, average unit volumes, restaurant operating margins, cash flow and return on invested capital," said Linda Lang, chairman and CEO of Jack in the Box.
“We believe in the tremendous potential of the Qdoba brand, and we plan to continue expanding in North America, with 70 to 75 new locations expected to open system-wide in fiscal 2013, including approximately 40 company locations. In 2014, we expect 60 to 70 new Qdoba restaurants to open, approximately half of which will be company locations.”
In May, second quarter earnings at Jack in the Box fell 39 percent on lower sales. Qdoba same-store sales in the second quarter decreased 2.0 percent for company restaurants. Qdoba's same-store sales for the year were projected be flat to 1 percent higher at company restaurants.
The company operates 2,256 Jack in the Box restaurants, including 1,710 franchised locations, and 647 Qdoba restaurants, including 307 franchised locations.